If a Company Is Located in an Area Where Floods

question 66

True/False

If a company is located in an area where floods or earthquakes are deemed to be possible,the company should record a contingent liability.

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Definitions:

Beginning Equity

The value of an owner's interest in a company at the start of an accounting period.

Revenues

The total amount of money generated by a company from its business activities, such as sales of goods or services, before any expenses are subtracted.

Operating Activity

Transactions related to the primary activities of a business, such as purchasing inventory, selling goods or services, and paying salaries.

Financing Activity

Transactions related to raising or repaying capital, such as issuing stocks or borrowing loans.